First IPO in Mutual Fund Industry in India – Reliance Nippon Life

Yes, First IPO in Mutual Fund Industry in India is getting launched on October 25. Mutual Fund Industry in India has risen to new heights in the near past. And is expected to rise even faster in the near future. There is sharp increase in the assents managed by different AMCs in India. There are lot of opportunities for the Mutual Fund Industry in India. And probably this is the reason one AMC has come up with the first ever IPO in Mutual Fund Industry in India.

Reliance Nippon Life Asset Management Limited seeks to raise upto 1542 crore through IPO. Open for subscription from October 25 to October 27. Price range is Rs.247-252 per share. Reliance Nippon Life Asset Management Limited is one of the largest AMCs in India. It manages mutual funds, pension funds, ETFs and portfolio management services. This is the reputed company in Mutual Fund Industry to come up with IPO. It has Assets Under Management (AUM) more than Rs.350000 crores.

How exactly any Asset Management Company (AMC) works. AMC manages different Mutual Fund schemes, and they charge the fund management and administration fee. This fee is borne by the Mutual Fund Investors. When NAV (Net Asset Value) of the Mutual fund is calculated, these management and administration fees are charged to it. The NAV is net of all these charges and expenses. So basically this Fee is the Revenue for the AMC managing that fund. There is one concept of Expense Ratio. This expense ratio is percentage of average of funds assets of the Mutual Fund. As per SEBI guidelines this expense ratio should not be more than certain percentage of total assets. SEBI has stipulated different expense ratios for equity funds and debt funds. So if the assets Managed by the Fund are more, then obviously, AMC gets more revenue. And Reliance Nippon Life Asset Management Limited is also one of the AMCs.

Reliance Nippon Life plans to use the proceeds of the IPO for expansion. They plan to set up new branches, upgrading technology systems, marketing, advertising and brand building.